Inside Jushi's Virginia Expansion: Q&A With Executive VP of Retail Brendon Lynch
Inside Jushi's BEYOND / HELLO Sterling location
Courtesy of Jushi

Inside Jushi's Virginia Expansion: Q&A With Executive VP of Retail Brendon Lynch

Lynch shares insight into the company's expansion and what consumers can expect, as well as offers a glimpse into Jushi's plan when adult-use sales go online in Virginia.

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November 12, 2021

Jushi Holdings Inc., a multistate operator and owner of cannabis retail, cultivation and processing licenses based in Boca Raton, Fla., announced the opening of its 26th store nationwide and second BEYOND / HELLO retail location in Sterling, Va.

BEYOND / HELLO Sterling will serve and provide registered agents and medical cannabis patients "an efficient, accessible and safe experience that goes beyond the traditional cannabis retail environment," according to a recent press release

© Courtesy of Jushi
Lynch

Here, Brendon Lynch, Jushi executive vice president of retail, shares insight into the company's expansion and what consumers can expect, as well as offers a glimpse into Jushi's plan when adult-use sales go online in Virginia.

Andriana Ruscitto: Can you talk a little bit about Jushi's opening of its second BEYOND / HELLO retail location in Virginia and the different features the dispensary will have?

Brendon LynchSo, we opened our second location in northern Virginia just last week, and the Virginia medical patients can expect a typical customer-centric BEYOND / HELLO retail experience, coupled with online ordering through beyond-hello.com and convenient in-store express pickup. Also, due to the rising demand, as well as improving accessibility for northern Virginia patients, we've expanded our delivery program to be in the Sterling location [and] the Manassas location. 

The Sterling location operates out of an 8,000-square-foot anchor position in a newly constructed 16,000-square-foot building. [It] brings Virginia patients our suite of high-quality brands, including The Lab, Tasteology and, most recently, our two in-house flower brands: The Bank and Sèche. 

The location is pretty different from our Manassas location. It's more typical of our current design, and it's also much bigger. So, as I mentioned, it's 8,000-square-feet, which is significantly bigger than Manassas, and [it] has 17 point-of-sale systems, 70 on-site parking spots and a separate delivery service area. It's located about 7 miles from Dulles International Airport, 30 miles from Washington [D.C.], and it's adjacent to Wegmans, Lowe's, McDonald's, Burger King on a very high traffic highway that merges with Interstate 50.

AR: What drove Jushi to the Virginia market?

BL: It wasn't on many cannabis companies' radars back in 2019 when we made the decision to go to Virginia. Really due to the limited nature of the medical program, specifically the ability to open only one store at that time per HSA [health service area] and the then THC caps on products; however, our initial interest in the commonwealth was due to it being a super limited license medical market, retail exclusivity, the ability to wholesale and deliver throughout the entire commonwealth and the expectation that each license holder would ultimately be able to add more stores, and that these THC cap restrictions would go away, which they did.

AR: What is the company looking forward to with the expansion?

BL: The regulators divide the state into separate geographic regions called HSA's, with one vertically integrated license per HSA. Each permit holder is required to be vertically integrated, meaning cultivation, extraction, processing and retail are all within the same facility. And then additionally, each permit holder was awarded the option of adding five additional dispensaries per total of six locations within our designated HSA plus delivery within and outside of the HSA.

So, our license allows us to serve patients in all of [the] HSA exclusively. So, no one else could serve patients in that HSA. Again, our HSA is in northern Virginia … and includes just some really iconic neighborhoods, such as Arlington, Tyson's Corner, Alexandria and Manassas. So, it gives us this opportunity to serve a very kind of dynamic and great population, and also a big population. I mean, there are 2.5 million people in this HSA, which is [about] 30% of the overall population [in Virginia]. 

The demographic is a terrific demographic and also a really appropriate demographic for Jushi. It's the highest per capita income, the average median age [is] 37 years old, it's home to five of Virginia's 10 wealthiest neighborhoods, has a significant commuter population, and [has] very kind of tech-savvy millennial customer [base] where we see a lot of early cannabis adopters.

AR: How does Jushi plan to expand its delivery services at the second BEYOND / HELLO retail location in Virginia to meet consumer demand?

BL: We launched and piloted the delivery program on Manassas [in the] beginning half of this year, and [we] learned a lot about what the patients were looking for in terms of where we go and how quickly to get there and what the process should look like. The team has done a really good job refining the process and making the ordering process [and the] fulfillment process really just kind of intuitive. So, the patient orders online at our beyondhello.com sites. They can select a two-hour delivery window, receive an SMS confirmation, view the tracking details and the routing, and ultimately receive a notification [of] when the driver is there.

As expected, I mean, it's just been one week of business, but the percentage of our overall business daily and weekly coming from delivery is more than double of what we saw in Manassas, which makes sense. It's [a] very densely populated [area], and there's a lot of businesses right nearby. But we're very pleased to see that the program has been refined, and I think from a patient standpoint [it's] very intuitive and friendly. The adoption seems to be more significant, which, again, I think makes sense for that area and also for a very tech-savvy customer [living] in the northern Virginia area.

AR: What opportunities does this expansion provide Jushi?

BL: I think we've seen some really kind of positive regulation development over the past year or so. As the medical program has evolved, we've seen flower being approved for medical sales in September of this year, and the forecast is that the approval for adult use is for Jan. 1, 2024. It's one of the fastest, if not the fastest market to adopt a medical program and pass adult-use legislation. Our current program has approximately 35,000 patients, and it's growing to about a thousand patients per week. As I mentioned, license holders initially were only allowed to operate one dispensary out of the vertically integrated processing facility within our HSA, and [the] program now allows for us to have an additional five locations, Sterling being our first of those five, and we have plans for three others and looking for that fourth location.

The THC cap, as I mentioned, was lifted for 5% to now 10 milligrams of THC per dose, with no limits on dosage. And I think with adult use [expected to start] no later than January 2024, Virginia represents a super limited license market with a very large trustable marketplace that has been saved by the commonwealth to be in the multimillions of dollars. So, I think just given that super limited license structure, the people, the demographics and a very progressive medical market, the expansion is a big opportunity for Jushi.

AR: Now that Jushi opened its second BEYOND / HELLO retail location in Virginia, does the company plan to expand those locations to adult-use when sales begin in the state?

BL: You bet. We're positioning ourselves now and getting ready for it, really in every regard. So, when it happens, we can open the doors to all patients and customers in northern Virginia.

AR: What type of challenges do you think Jushi could face when making the transition to selling adult-use cannabis at its Virginia locations? How is the company preparing to overcome these challenges?

BL: First of all, this has been something we've been talking about quite a bit, not only for Virginia but also for Pennsylvania, which is on the horizon as well. I think from a store's point of view, which is, my point of view, we're thinking a lot about staffing and ensuring that the teams that we have in place now are the teams that will be able to transition us into adult-use and also keep up with that significant increase in volume and number of customers and patients that we see every day.

Secondly, [is] how we operate the dispensaries. We need to be sure that we can operate in a way that we can pivot literally overnight to be ready for that increase in volume—so continuing to look at the efficiencies with how we run the business.

And I think that the third piece is inventory, again doubling the revenue potentially on day one. We need to be sure we're in a position where we actually have the product for our customers and for our patients.

AR: I noticed in a press release that the opening of this retail location is the company's second of six dispensary openings in Virginia. Does Jushi plan to open the additional four locations under the state's medical or adult-use market?

BL: So, we have four more to go, for the time being at least, and we've identified three of those locations and are working on the fourth. Obviously, all within the same HSA, northern Virginia. Our plans are to open three, possibly even those four, next year. And at this point, unless adult-use were to move forward, which we're not anticipating or don't have any reason to anticipate, they will all open under medical, and quickly thereafter pivot to adult use. And with that in mind, I guess this goes back to your last question as well. The other thing we've been considering, and you'll see it at Sterling, and you'll certainly see it in our next few locations is, we're designing these stores now to operate as recreational stores.

© Courtesy of Jushi
Jushi's express station at BEYOND / HELLO Sterling

AR: How does Jushi plan to differentiate itself in Virginia's market as it continues to expand?

BL: One [is] our product. I mentioned we have a very high-quality suite of brands right now ... so we'll continue to develop and create best-in-class products. Secondly would be the stores. We are designing these stores to not only be reflective of the brand and reflective of the communities in which we reside but also to be able to meet the needs of our customers. So, again, quite a few of our customers, almost two-thirds, begin their experience online and ordering online. Most of those customers again want a really fast and efficient experience.

So, we do that through express. We do that through the curbside pickup; we do that through delivery, certainly. But, even with that, we're designing the stores and curating the experience to still be able to immerse them in the brand. Even if they want to get in and out fast in five minutes, give them something special so that they're still getting a full taste of the brands in that five minutes. And then for the other third of the customers that want something more immersive or want more education or are maybe new to cannabis, we're building the inside of the stores and the sales floors to be very interactive, very display focused and very educational, both in terms of the tech we're using, but also certainly in terms of the folks that we have running the stores.

Editor’s note: This interview has been edited for style, length and clarity.